Bayer Cuts Covestro Stake to 44.8%

Germany's Bayer AG (BAYN.XE) said it has made substantial progress in further reducing its shareholding in Covestro AG (1COV.XE), as the pharmaceutical and chemicals giant gears up for the planned tie-up with Monsanto Co. (MON).

Bayer said it cut its direct stake in Covestro--Bayer's former high-tech polymers business that was floated in 2015-- to 44.8% from 53.3% late Tuesday. It did so by placing 17.25 million Covestro shares in an accelerated bookbuilding after the market had closed. The shares were placed at 62.25 euros ($70.11), below Covestro's closing price of EUR66.03.

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Bayer's planned deposit of Covestro shares in the Bayer corporate pension trust will reduce its shareholding by a further 4 percentage points, it said.

In addition, Bayer issued EUR1 billion in three-year bonds that can be exchanged for Covestro shares when they mature in 2020.

As part of the transactions, Bayer agreed to a 90-day lockup period.

Bayer had said it plans to fully dispose of its Covestro stake in the medium term.